The Benefits of a Performance Rights Organization
BMI and ASCAP are performance rights organizations (PROs) that serve to protect the interests of songwriters. Anyone who plays songs publicly is required to pay royalties to the songwriter if that songwriter has indicated they desire payment and they are a member. Radio stations, movies, internet streaming services, and television shows that use songs are required to pay. Restaurants and offices that play music are supposed to pay royalties as well.
Since songwriters obviously can't keep track of every instance of one of their songs being played, they join a PRO that handles the collection of royalties for them. Songwriters who are just breaking into the business might have to decide which organization to belong to, so it's a good idea to review the two largest organizations—BMI and ASCAP—as well as some others that are relevant in the market.
ASCAP has 670,000 members as of 2018, according to its website. One of the oldest PROs, it was founded in 1914 and boasts Beyonce, Justin Timberlake, and Dave Matthews as members. The organization is owned and governed by its members. Royalties it pays to its artists are calculated by two formulas.
Use Weight x Licensee Weight x Follow the Dollar Factor x Time of Day Weight + Premium Credits = Credits
Credits x Share x Credit Value = Royalty Payment
Use weight is the value assigned to each type of use, and licensee weight is a factor determined by the license fee paid by the station or stations. "Follow the Dollar Factor" refers to where the license fee was paid from, e.g., a radio station or sporting event. "Time of Day Weight" is the value assigned to the time of day that the performance was played, taking into account prime time listeners.
The share value is the amount split between songwriters and publishers. Credit value refers to the financial income from the organization, which is split between all members.
Premium credits are audio feature premium credits, a classic song bonus or TV premium credit.
To join ASCAP, you must be 18 years of age or older, and you need to provide your legal name, address, email address, and Social Security number. You can join as a songwriter, a publisher, or both, but each requires a $50 application fee. So, if you are joining as both a songwriter and a publisher, you'll pay $100 to apply.
Founded in 1939, BMI is not as old as ASCAP but it does have more members—800,000, according to its website. This PRO was founded by radio executives, and its original mission was to promote newer forms of popular music, such as jazz, country, and eventually, rock 'n' roll.
BMI, like ASCAP, splits royalties differently between songwriters and publishers, generally splitting the total share in half for each.
You can join BMI as a songwriter with just an email address, and songwriters younger than 18 can join if they also have a custodial trust bank account. Joining as a publisher also requires the name of the publishing company and a credit card. Songwriters must sign two-year contracts, while publishers must sign five-year contracts.
While the vast majority of popular recording artists are members of either ASCAP or BMI, those are not the only PROs in the market.
Perhaps the most notable of the other options is SESAC. Unlike ASCAP and BMI, membership is not available to just anybody; you have to be invited. With only 30,000 members, it also is far smaller than both ASCAP and BMI, but among those members are songwriting heavyweights like Bob Dylan and Neil Diamond.
SESAC, which markets itself as more tech-savvy than its competitors, does welcome submissions from nonmembers, but you will need to wait to be vetted—and then invited—before joining.
PROs cover their expenses by taking a cut of royalties they collect on your behalf. According to Royalty Exchange, the fee is about the same, regardless of which PRO you choose—approximately 11-13 percent. While this may seem like a lot, the royalties PROs collect often are dollars artists would never see if they didn't have an organization representing them in the market.
SoundExchange exists to collect royalties for performers and sound copyright owners on digital music that is played on non-interactive platforms. This typically refers to music listened to digitally on a platform that features someone else selecting what you will hear next. Many streaming services have worked out deals to pay the other PROs digital revenue directly and bypass SoundExchange.
SoundExchange also is different from PROs in that it exists to pay the performers, not the songwriters.
Performers can register for SoundExchange and join by filling out a couple of simple online forms. There is no fee to join.
Although ASCAP, BMI, and SESAC dominate the market in the U.S., several other PROs serve songwriters in other countries. Among those organizations are SOCAN, serving Canada, and PRS For Music Limited, serving the United Kingdom. Songtrust offers an extensive list of every PRO serving every country or region of the world.